By Les Dunaway

We had an interesting couple of weeks. The market is still headed down and no one outside the Beltway sees any positive signs.

• House prices have now lost more than in the “Great Depression” [read]
• The euro has gone in the tank over the PIIGS mess but yet gained against the dollar [read]
• Moody’s has joined S&P in warning of a downgrade of the US credit rating if Washington doesn’t get serious about the debt ceiling [read]
• Roubini sees four signs that the global economy will again crash, no later than 2013 [read]

The gamesmanship we are seeing in Washington is frighteningly similar the what we’ve seen from the PIIGS. It makes me want to scream “How effing stupid are you?”. In a world with several current examples of what doesn’t work, we still see people proposing more of the same. February saw Robert Reich calling for 70% tax rates and being echoed, in March, by members of Congress. It’s clear that neither Mr Reich nor the “Congress-persons” have read or understood “The Revenue Limits of Tax and Spend“.  I recommend the state of Illinois as a current events study. [read] [read] [read] [read] If some of these people had a clue about business and had ever read an annual report, they’d know that companies like Caterpillar, Ford, and many others could move their operations off-shore and make more money. Even Government Motors (GM) is selling more cars in China.

From the story about Caterpillar [read] “Oberhelman sent along three letters to Quinn that Caterpillar has received on relocating, including letters from the governors of Texas and Nebraska.” I wonder how many such letters, from how many countries, with what kind of incentives Mr Oberhelman would get if the entire US gets as anti-business as Illinois?

During the auto bailout, to which Ford said “No thanks”, it was reported that Ford had evaluated moving North American production to their plant in Brazil and found that it was feasible at certain US tax & labor cost levels.

At a certain level, which is long past in Washington, I believe we must begin to have the Fools or Knaves? conversation. It goes like this “Can they REALLY be that stupid / ignorant / incompetent?” If the logical answer is No, then we must look for another reason.  In the present case, only a desire to destroy our country and our way of life comes to mind. What do you think? Are they really that stupid? or is it something else?